I'd still say she's on the upper half of recoveries. A character doesn't have as many options as she does when recovering and gets dismissed as having a bad one. She does have one of the lower ones compared to other top tier characters though. Better than Marth's/Ice Climbers at least.
She has options, but doesn't really have any mix-ups, nearly every character has the same flowchart to edgeguard Sheik.
1. Wait outside Sheik's fair/dj needle range when she's floating to the edge (if she isn't recovering from high then skip to 3).
2a. If she djs, needles or fairs, react and bair her.
2b. If she just drops low, grab the edge.
3. Maintain frame invincibility on the edge when Sheik is in range to double jump and swat you.
4. Wait for Sheik to poof.
5. Press left/right when Sheik poofs.
6a. If Sheik goes for the edge, she dies.
6b. If Sheik poofs onto the edge (or air dodges), choose optimal bnb combo to reset her position off-stage (falcon: stomp -> knee, falco: shine -> punish, fox: waveshine across the stage -> punish, pal marth: dair -> tip etc.)
6c. If Sheik poofs onto a platform, take the same steps as you would in 4b.
6d. If Sheik up+bs vertically up then wd onto the edge.
6e. If Sheik spaces an up+b to land directly onto the edge, wait.
You can also just bair her out of her up+b start-up (since it takes too long for the invincibility frames) if she does it too close to the edge, this is a BIG weakness about her recovery which not enough people exploit.
Examples:
http://www.youtube.com/watch?v=1k2YlATUvXg (1:05, 1:22, 1:53, 2:05)
http://www.youtube.com/watch?v=1m1a_qYvWdc (1:35, 7:50)
http://www.youtube.com/watch?v=WpzCmzCM84c (3:10, 4:10)
This is a little different when she still has a double jump and an air dodge at low percents (since she has the mix-ups to both dj -> sweetspot and dj -> air dodge), but those are universal options, not Sheik specific.
Sheik also has the option to drop down and wall jump -> air dodge/bair/reverse needle on certain stages, which I guess is the closest thing she has to a mix-up, but from experience someone who understands this option will just hit you on reaction with frames when you drop below the up+b sweetspot range.
Also, I'm curious, which characters do you think have worse recoveries than Sheik? I wouldn't say that Marth and Ice Climbers (not counting SPopo) are two of them, personally.